EBA supports banks' criticism of accounting for liquidity buffers

The European Banking Authority has joined the opposition of banks and banking groups to changes in the accounting treatment applied to assets held in banks' liquidity buffers. Basel III does away with a filter that protected banks from the volatility from unrealized gains and losses on billions of dollars of bonds carried on their books. At the same time, the International Accounting Standards Board is changing a rule that banks might have otherwise relied upon to solve the problem. The EBA has asked that the IASB take another look at its position on the rule.